Tough choices for employers and employees!

Last week a local construction company’s CEO revealed to the media that his entire workforce had laid down their tools until further notice. It had been some time since they were last paid, he said, and finally they were just plain fed up with the unending management excuses. Until they had their cheques, they would lift no blocks, mix no cement and hammer no nails.
Confronted by TV cameras and microphones at his doorstep, the CEO said: “We can’t pay our workers if our clients can’t pay us. We thought it would have been better for the workers to have a job and be paid late than to have no job and no pay to look forward to, however late.”
Among those who watched the newscast was one of the CEO’s clients. He did not like the insinuation that he was partly to blame for the workers’ protest. The CEO had no choice the next day but to issue a statement saying in effect that the particular client was good for the money. Not only had the workers put their boss on the spot, they had also embarrassed his clients.
How many St Lucian employers are caught in this Catch-22? How many are simply stiffing their workers? Is the construction company referred to here merely another victim of bad management or are local workers still unaware of the state of things around the world? Surely they must know about the global layoffs, the close to five million unemployed Americans, more millions on the dole in the UK. That’s what the international news is about these days: public servants on strike; students taking to the streets; businesses closing down, some doomed never to return. Even as I write Spain and Italy are struggling to pay their bills. And that’s only a small part of the fall-out from the worst recession the world has ever known. Are we really as uninformed about these things as our laissez-faire attitude suggests? Or are we a nation of spoiled-brat workers, buffeted from reality by helpless, news-spinning politicians themselves desperate for a job?
During his most recent Budget presentation, Prime Minister Stephenson King announced proudly that while the other OECS territories had experienced negative growth in 2010 “the economy of Saint Lucia grew by 4.4 percent.”
Moreover, the Eastern Caribbean Central Bank had predicted 5.4 percent growth this year. “Our own forecast is a more modest 4.5 percent,” said the prime minister, who promised to concentrate on “the implementation of a job-creating growth strategy.”
As for things on the international front, he noted that the world economy was showing signs of a strong rebound from the effects of the financial crisis, even though there were still fears of inflation related to rising oil prices.
Still quoting from the prime minister’s last budget address: “Moreover, the recent events in the Middle East and North Africa could have serious repercussions in the energy sector and the world economy. Nevertheless, the medium term prospects for the global economy are on the upside as the growth momentum is expected to be maintained throughout 2011 and 2012 . . . The slow pace of recovery in advanced economies, to which Caribbean countries are closely linked, impeded Caribbean countries’ growth in 2010. While tourism generally recovered, construction activity remained weak, inflationary pressures intensified, balance of payments positions were adversely affected and unemployment worsened.”
If the word on Saint Lucia sounded too good to be true, the prime minister explained that the island’s economic growth was driven by the construction and tourism sectors. Notwithstanding Hurricane Tomas, he observed, the tourism industry had “recorded strong growth.” The US visitor market alone grew by 31 percent. Following a decline of 23 percent the previous year, the PM said in 2010 the construction sector had expanded by 20 percent—driven by public sector investment and supported by private sector expenditure.
Perhaps the earlier mentioned workers were among those who actually believed all the PM said during his budget presentation. After all, we are notorious for believing whatever makes us feel good for the moment. Despite the depressing evidence all around us, despite the news in Greece, Norway and elsewhere, some of us chose to believe without question what we were told about our immediate economic future. Few Saint Lucians cared to find out how the PM arrived at his growth figures. Fewer still paid any attention to what was happening overseas, especially in those places on which our tourism industry depends. And now many workers believe they are being taken for a ride by exploiting employers who say they are on the verge of bankruptcy thanks to the financial meltdown.
Joseph Alexander, the executive director of the St Lucia Employers Association spoke to the STAR about the situation. “By law you are supposed to pay your employees by a specified date,” he said. “When the employee joins the organization that’s really supposed to be in their letter of employment. But even in these tough economic times a lot of companies have chosen not to lay off workers, they have decided to bear the pain, at least for the time being.”
One of the main reasons is what it costs to train a worker, said Alexander. The trained worker understands his company’s operations. So the last thing on the employer’s mind is to get rid of a good worker and then, if as expected the economy picks up again in 30 months to start training new workers all over again. “It’s tough,” said Alexander, “but businesses try hard to keep people. In the hotel sector it is a bit different because they have always had their rotation system. Now other employers are adopting it.”
Alexander called on workers to recognize that things had changed drastically in the work environment.
“If your employer has decided to keep you regardless of these very difficult economic times,” he said, “if he asks you to bear with him and accept some late pay days, you should do your best to accommodate him. It is not as if he’s not going to pay you. It is kind of a preferred debt. Cash flow is almost stagnant. I think a certain level of understanding should prevail in circumstances like this. Despite what the law dictates, the employer and employee can make their own arrangements. I suggest employees be a little more understanding, for their own good.”
Alexander, who says the Employers Federation has been at the center of negotiations between workers and employers, dished out special praise to the National Workers Union for its understanding of the day’s special circumstances in the workplace.
“They are not demanding anything that could lead to companies having to close down. They understand the situation,” he said.
The Executive Director of the Chamber of Commerce, Brian Louisy, also spoke on the current climate: “Saint Lucia did not start feeling the financial crisis that hit the US in 2007 until much later. The way business people operate is that when things slow down they do not immediately begin to cut. The reporting year relates to the previous year, so you don’t see the immediate effect. A lot of people made adjustments that probably helped, so it took a little while for us to feel the effects of the crisis. I really think we have felt the worst. The banks also tried to work with their clients through the bad patch. But while year after year there has been talk about recovery it hasn’t happened as quickly as expected. At a certain point the banks won’t be able to hold off anymore.”
Speaking directly to the issue of local employment, Louisy said: “The traditional business person in Saint Lucia is not in the habit of cutting workers when things go down. What has changed is how employers go about keeping their staff. A number of companies have decided not to send workers home but instead demand greater efficiency. They have tried to make workers understand the situation: sales are down, we do not want to send you home, so let’s work together. All of that is shorthand for let’s work harder for our own sake. People are moved around to take on more responsibility. In some sectors where workers knew that layoffs would be required, they decided instead to go on rotation so that everybody could still have a job.”
The Chamber exec admitted that some St Lucian workers are not in touch with the reality of what is going on. “Some are unrealistic,” he said. “But you can’t just make such a carte-blanche statement. The workers’ situations need to be taken into context. There is a need, in difficult times, for everybody to understand what the situation is and what are the conditions, and to make decisions based on that. In a booming economy, it is difficult to understand why workers would not be paid on time. However, when you know things are tight you must consider ways to deal with that situation. If in your mind you prefer not to work rather than get paid late that is your decision to make. There is need for Saint Lucian employees and employers to develop a better working relationship. The old them-against-us attitude has got to go. There is need for dialogue and discussion. Like it or not, we are in this mess together.”
In difficult times, Louisy explained, the first thing businesses look at is what expenditure they can do without.
“Some businesses continue training their staff so they can be more productive. It is an opportunity when things are not hectic to train staff. Other businesses say when things are tight and sales are down that they market even more to get a bigger share of a smaller market. Cost reduction and economizing is the most effective way to trim the fat. You have to look at things like inventory, utilities and fuel consumption.”
Louisy suggested that the staff themselves can look at ways to save their company money: identifying wasteful practices or creating opportunities for revenue generation, for instance. “That engagement with
staff must take place. Employers must not freeze employees out of the process.”
He had some direct advice for workers in the current climate: “You need to be the best you can possibly be. If you are working for a company you must be true to that company, even if you do not see your entire future tied to it. If you do not appreciate the fact the company is providing you a livelihood, and that you must do something in return, then don’t be surprised if you are the first to be sent home when things get really tough. Firms will start to look at the return they get from every worker and they will make unpleasant decisions. People need to realize it is to their advantage that they help their company to grow, not bring it down. Work smart, contribute, be loyal and support your firm. Obviously I am not suggesting people should always accept the worst conditions. But if you have a decent job, do your best to keep it by increasing your value to your employer.” But is there a sense with some workers that they are being exploited. Are some employers suspected of milking the recession?
In the United States the suggestion is that some employers are milking the recession. A 2007 a study suggested employers had indeed taken decisions to get as much as possible out of workers for less. Good business sense or plain exploitation? Andrew Sum, an economics professor
and director of the Center for Labor Market Studies at Northeastern University in Boston, insists that “not only did they throw all these people off the payrolls, but they also cut back on the hours of others who stayed on the job.”
In an article in the NY Times last year Bob Herbert quoted the professor and called what American Corporations were doing “a sin and a shame.” Herbert said that as Professor Sum studied the data coming in from the recession he realized the carnage that occurred in the American workplace was out of proportion to the economic hit that corporations were taking.
He said: “While no one questions the severity of the downturn—the worst of the entire post-World War II period—the economic data show that workers to a great extent were shamefully exploited.”
But is this also the situation in St Lucia? A local accountant says, “Not at all,” he insists, “the fact that there have not been huge layoffs means employers actually care.
“The financial issues they face are very real. Ours is a small island and I think the relationship local companies have with their banks has really helped to cushion the blow. There are people who are heavily extended on their loans. Most employees would not know. What they do is they are being asked to do more or work, sometimes for less pay. Unfortunately, they see that, plus rotations, as exploitation.”
There was also the fact that “some employers may use the recession tactic to lay off bad workers or to get workers to improve by suggesting they might be fired. This is really unethical and bad for business in the long run.”
David Demacque of the St Lucia Civil Service Association addressed the issue of worker exploitation.
“Business is about profits,” he reminded me. “Sometimes labour in business is treated like all other commodities, and that is where you run into problems. Perhaps it is the first commodity that management resorts to when they are seeking to maximize profits. They might suggest lay-offs or longer hours and do things to keep wages and costs down, like very bad working conditions. When the crunch comes, the workers get the perception that they are being abused. What is needed is for the employer and worker to understand they need one another. There needs to a balance. You give the worker his due and the worker gives the employer his due. When that happens there will be no need for trade unions!”
Workers, unions and employers have to create a win-win environment, said Demacque.“Industrial relations must be conducted in a manner that it won’t jeopardize the business of the employer. But at the same time workers must feel they are human beings and that they deserve a share of the output.”
Demacque recalled the prime minister had in 2010 promised no public-sector workers would lose their jobs but that there would be a cap on new employment.
“We have had experiences where the union has attempted to unionize workers and having applied to the Labour Commissioner to become the bargaining agent of these workers managers would lay off workers to discourage them from becoming unionized.”
Workers choosing to down their tools in the present atmosphere is not always the best option, said Demacque.
“We always attempted to advise workers that this is a decision of last resort. A responsible trade union needs to be very cautious, especially in these days of financial crises, that
they do not cause workers to take positions that would amount to them losing their jobs. The first principle from a trade union point of view is the saving of jobs. That is the raison d’etre for the existence of a trade union.”
Echoing the Chamber’s Brian Louisy, Demacque said: “We are all in this together.”
We either fight the fight together or, as they say, all fall down!